Uber launches low-cost service in Pakistan amid broader Asia push

The logo of car-sharing service app Uber on a smartphone over a reserved lane for taxis in a street is seen in this photo illustration taken in Madrid on December 10, 2014. REUTERS/Sergio Perez

ISLAMABAD (Reuters) - U.S.-based ride-hailing service Uber Technologies Inc [UBER.UL] launched in Pakistan on Thursday, venturing into a country where credit cards are rare and security is a concern.

Uber’s launch comes shortly after rival service Easy Taxi, backed by German firm Rocket Internet, pulled out of Pakistan amid a broad exit from Asia, where competition from local ride-hailing start-ups including Singapore-based Grab Taxi and China’s Didi Kuaidi is strong.

Uber’s Pakistan launch is part of a $250 million drive into central Asia, the Middle East and North Africa, Shaden Abdellatif, Uber’s head of communications for the region, told Reuters.

It launched its low-cost uberGo service across Lahore at 13.7 Pakistani rupees (13 U.S. cents) per km, a price Abdellatif said was low enough to attract as many customers as possible.

And in a departure from its usual business model, Uber customers will be allowed to pay in cash, rather than credit cards, which are rarely used in Pakistan.

“The response to our arrival has been fantastic - both from riders and drivers,” Abdellatif said.

In Pakistan, Uber must contend with one of the lowest Internet penetration rates in Asia.

The safety of both passengers and drivers will also be a major challenge in a country with a high crime rate and an intractable Taliban insurgency. In neighboring India, the government temporarily banned Uber after an Uber driver was accused of rape.

Abdellatif said all Uber drivers would go through rigorous screening, as well as undergo mandatory training aimed at raising awareness about sexual harassment.

“We are also engaging the local law enforcement on ways we can develop the incident response process,” she added.

Uber, currently valued at over $50 billion, has expanded more quickly globally than any company in history and is operating in 300 cities in over 60 countries.

(This version of the story corrects region in spokeswoman’s title paragraph 3)